Well, my friend is indeep paranoid. He was written up in the Sacramento Bee concerning his short sale for two houses that became upside down rather quickly.
He has been doing flips for about 4 years and doing quite well and then the movement of the appreciation changed
not suddenly but too quickly for him to recover.
I understand your analysis and tax strategies et. al but you have to have the money to allow negative cash flow or no cash flow. For the new investor that’s not an easy obstacle to overcome.
With the average house coming in at $300,000 and that’s a dump. Your rental payments aren’t going to cover much
of your mortgage payments unless you do the 1.95 ARM which I always advise for rental properties.
I applaud your positive outlook and am sorry if I sounded all gloom and doom. But the values are going down primarily because they were artificially inflated.
Sacramento is still in the dark ages in a lot of respects. (i.e.)with wages/salaries. There are some good salaries in specific industries but this isn’t the Bay area and people who work for Kaiser here versus those who work in the Bay area are way underpaid. The Bay area residents who moved here are still commuting to the bay to maintain their salaries because Sacramento doesn’t pay the same.
Houses are staying on the market past 4 months which was unheard of 8 months ago. Multiple offers? a thing of the past. I’m in a wait and see mode but I see foreclosures in record numbers.
But thank you for your insightful and well researched information. We will just wait and see.
I’m advising clients to use their money to buy an Internet Business! or just hold on for the turn around